October 09, 2005: "Over the past 10 years airfares have fallen across the board while wages in the industry have continued to rise, in part because of workers' ability to bring an airline to a halt."
That says it all, in a nutshell, as to why Legacy Airlines are fast going
down that bone yard road leading to the dinosaur tar pits. To
survive in this highly competitive world, British Airways unions
will have to bite the bullet and stop resisting attempts to increase the
productivity of all airline employees.
The new CEO, Willie Walsh, was surrounded on all sides by powerful unions,
when he saved "Aer Lingus, the Irish state-owned airline, by cutting fares, overheads and jobs."
And, he managed to do that while convincing the Aer Lingus workforce to
support his decisions. It now remains to be seen if the unions at BA
will be as rational as those at Aer Lingus. I am not holding my
breath, but I would love to have my skepticism proved unjustified.
If they support the proven Walsh strategies, the airline will return to
profitability and jobs will be preserved and even expanded in the long
run. It only requires that union bosses quit trying to stir up
rank-n-file hate, by constantly demonizing management.
April, 2005: Growth has accelerated rapidly over the past five years,
Skywest Airlines. "In 2000, SkyWest operated just 16 CRJs, according to Raymond James & Assoc. At the end of 2004, it was up to 137 CRJs (125 CRJ200s and 12 CRJ700s), including 28 added last year of which 24 were new and four were purchased from Independence Air. It will take a further 20 CRJ700s this year, a move that will require hiring 200 more pilots. Sixty-nine Brasilia turboprops round out the fleet."
The carrier also enjoys "the strongest balance sheet in the Regional airline industry," according to RJ&A. Its long-term debt to capitalization ratio was 61% at Sept. 30, 2004, compared to an industry average of 92% among its peers. Long-term debt totaled $463.2 million at year end and it was sitting on a cash hoard of $550 million.
September 07, 2005: Jetblue
traffic rose by 29.8 percent in August. RPMs (revenue passenger miles)
rose to 1.98 billion, compared to 1.5 billion in August of 2004. Capacity
rose 28.7 percent to 2.21 billion Asks (available seat miles) from 1.71
billion. Load factor, was up too: 90.1 %, compared to 89.3
%, in August, 2004. For the first 8 months of this year, JB's
traffic has grown by 30.8 %, to 13.52 billion RPMs. Capacity rose 25.1 percent to 15.39
Asks. Load factor, to 87.9 % from 84.1 %. This all provides a
stark contrast to what is going on at the Legacy Airlines, which
still have so many union millstones
hanging about their
Please note: Jetblue
is a non-union airline.
Amazing Jet Blue.
September 02, 2005: Shares
of SWA upgraded, while AMR downgraded. SWA
said that "traffic rose 13.7 percent to 5.67 billion revenue passenger miles, capacity rose 12.2 percent to 7.45 billion available seat miles, and load factor improved 1 percent to 76.1 percent."
Jet Blue shares gained 34 cents. Air Tran shares rose
14 cents. In contrast, NWA shares fell 39 cents, DAL
shares fell 3 more cents, UAL shares slid 2 cents.
August 30, 2005: NWA
losing $4 million per day; seeks more concessions from its unions. The
idiotic strike by its mechanics union, is now in its second week.
Meanwhile, LCCs are still making profits, creating new jobs, expanding
their routes, gaining market share at the expense of the Millstone Legacy
Carriers, and buying new planes. Only a militant acolyte unionist
cannot understand the "why?" of such a stark contrast.
August 09, 2005: DAL
stock plunges after one analyst warns to sell Delta shares.
He fears DAL, the 3rd largest carrier, is close to filing
bankruptcy. "The company's market
capitalization - the total
value of the company's outstanding shares - fell to $286 million, less
than one-third the amount of discount carrier AirTran Airways despite
Delta being 15 times larger in terms of annual revenue." DAL has almost $10
While high oil prices are now a very strong factor,
there is no doubt that at least several of those wasted Billions, would
not have been poured down the drain, had the unions immediately
cooperated with management, to slash costs as much as possible,
as soon as possible. Persistent
foot-dragging, by the unions, has been the biggest factor of all
in management's failure to bring costs in line with actual revenues,
since the end of 2000. Unions don't create, protect and preserve
jobs; they destroy them.
August 08, 2005: The
Last Hurrah of NWA unions? "Northwest's current actions
are particularly egregious examples of the
anti-union tactics used against our union brothers and sisters by the
corporate world. It is only through solidarity that we can preserve the
gains that unions have made, and preserve middle class America." So
says Ted Ludwig, AMFA Local 33 President, at NWA.
Seems I heard much the same kind of bilge, from
militant unionists at Eastern Airlines, on their way
down the bone yard road to the dinosaur tar pits. Unions don't create, protect and preserve
jobs; they destroy them.
August 07, 2005: "Struggling Delta Air
Lines Inc. and Northwest Airlines Inc. are bankruptcy bound, he said,
and he also believes Fort Worth-based AMR Corp. and Continental
Airlines Inc. of Houston will eventually have no choice but to seek
similar protection because they won't be able to shed debt and
restructure contracts outside of Chapter 11. That inability to shed
costs will leave them at an unworkable competitive disadvantage to
competitors who have reorganized. The legacy carriers are unsustainable
in the long run," said Mr. Cordle, whose dour outlook isn't embraced
by all industry watchers, some of whom think the industry might be
seeing light at the end of the tunnel. Mr. Cordle says that's more like
the fading glow from an era's sunset."
August 06, 2005: NWA unions pledge to strike, management
pledges to continue flying if they do. "The airline is seeking $1.1
billion worth of wage concessions from its workers. It got $300 million
from pilots and salaried employees last year, but mechanics and flight
attendants have resisted. The company has proposed $176 million
worth of cuts from mechanics, including a 25 percent pay cut. It also
wants to lay off roughly 2,000 of AMFA's current 4,500 Northwest
August 01, 2005: NWA lost at
the rate of $4 million per day, during the first half of
2005. Unions still preparing to strike. Apparently, they
seek the same kind of "union victory" for Northwest, that was the
result of the intransigent unions striking Easter Airlines. NWA CEO
Doug Steenland, "...said that many of
company's major competitors have significantly lowered their labor
costs, both in and outside of bankruptcy, leaving Northwest with the
highest labor costs in the industry."
July 25, 2005: NWA
unions prefer War to Survival. NWA directors and other
types are getting rid of their own stock, indicating they suspect
inevitable. FAs have filed a lawsuit to try and prevent the
training replacement workers, in anticipation of a strike.
"Bankruptcy, which could come quickly in the event of a strike, almost
certainly would lead to termination of employee pensions and even
unilateral cuts in pay and other benefits. The result would almost
surely be a smaller airline with fewer jobs.
As of March 31, Northwest had $2.3 billion in cash and marketable
securities, down from $3.1 billion a year ago. The company reported a
net loss of $862 million last year."
Equity analyst, Ray Neidl says that this country needs only two or
carriers. There are now six. Unions ignore that kind of
at their own peril. Down the bone yard road to the tar pits,
dinosaur airlines......... Better to be dead out of a job, than
union economic policies amount to total
July 24, 2005: Excerpt.
"Several years ago I attended a party where the main topic of
conversation was pensions and benefits. No, this was not some gathering
of accounting geeks, but rather a social gathering of folks who all
worked for United Airlines, a company currently on the brink of
bankruptcy. The conversationalists were international flight
attendants, and they made a point of letting me know that a) they were
the cream of the flight attendant crop, and b) they’d never go back to
humdrum workaday routines of domestic travel.
"Silently, I knew that the jobs they described,
with seven-day work months paying $80-$90,000 a year with benefits,
couldn’t last. They didn’t. Today, of the three ladies at that party,
two took early retirement, while the third couldn’t afford to leave
United. She now works four-day weeks as a domestic flight attendant and
is thankful to have the job.
"While the convenient excuse for the collapse at
United (or any other airline) is to blame 9-11, the reality is that
airline worker benefits and salaries were at unsustainable levels long
before the terrorist attacks.
The problem arises when the innovator fails to respond to the
challenges of the upstart. That’s what happened in the airline sector:
companies and their unions (especially at United) refused to recognize
the competition Southwest and others brought to the market.
July 23, 2005: Read this to find out
politicians and unions conspire to hold down the airline consumer,
pick his pockets. American Airlines was able to show a
this last quarter, not because it provides its customers with the best
product at competitive market prices, but because it continues to lobby
for the Wright
Amendment, which prohibits airline customers from having Free-Market
choice, when flying out of Dallas/Ft.Worth. The more the
their way, the more the customer must pay.
July 23, 2005:
NWA mechanics ready to strike. Airline plans to continue
and GWB will not intervene. "Since 2000, the company has cut some 4,400
mechanics and cleaners, who also are represented by AMFA. Much of this
has been done through outsourcing. The union fears that the airline
will farm out still more jobs in the months ahead.
The management wants $176 million in concessions from AMFA, which has
countered with a plan it says will save the airline $143 million. The
airline puts the value of the union plan at $87 million, tops.
Northwest warns that if it can't get these concessions plus givebacks
from other unions for a grand total of $1.1 billion, it faces
bankruptcy — an option that could deal its workers an even bigger
July 19, 2005: In their haste to
Airlines into bankruptcy, the mechanics union at NWA has voted
strike. NWA is forecast to lose "$3.29 a share, with a loss range
of $3 to $3.80 among the nine analysts surveyed -- wider than last
year's range of 90 cents a share."
Apparently, the union workers don't really need or want those
would rather see the LLCs continued to expand their market share, while
continues down the bone-yard path to the bankruptcy Tar Pits.
plans to continue flying, if they strike. They are outsourcing
much of their maintenance, and hiring replacements for the strikers.
July 22, 2004: Delta
Pilots finally start to wake up to Reality (just a little bit,
DAL just posted its worst quarterly loss, since 1978 ($1.96 billion in the second quarter,
causing Standard and Poor to
lower DAL's debt rating for the 3rd time in 2004). The odds of a
bankruptcy are growing rapidly.
DAL-ALPA pilots now offering to take a 23% wage cut, after dragging
their heals for many months, while the hemorrhage continued
unabated. DAL requested ALPA to agree to a 30%
cut last winter. Since they are the highest paid in the industry
(and probably also the least productive), that would seem to be a very
reasonable request to rational minds.
22, 2004: AMR
ekes out a profit of $6 million for 2nd quarter. That amounts to 3 cents per share. Last
year in the same quarter, AMR lost $75 million. Continental lost
$17 million in the 2nd quarter of 2004. The pilots at AMR finally
got real many months ago, barely averting bankruptcy at AMR. That
made all the difference in the world, when compared to the $1.96 BILLION loss at Delta.
July 22, 2004: Northwest
Airlines 2nd quarter loss was $182 million. That amounts to $2.11 per share. NWA has
been seeking wage and other concessions from its unions for over a
year, without success. They hope to increase their daily load
factor, to help offset higher fuel costs. But, if passengers
continue to flock to lower price airlines, NWA will keep trudging down
the dinosaur path to the tar pits. Only a sudden change in
union mentality can change that scenario, but history indicates that is
a rather remote possibility.
11, 2004: Herbert
D. Kelleher, the chairman of Southwest
Airlines, describes the govt. airline loan guarantees as little
more than life support for uncompetitive airlines. Until the
airlines restructure their business models to reflect what the
consumers are demanding (low fares being the core of the model), they
will just be throwing good money after bad. It is obvious this
has come down to a battle for the survival of the fittest. The
Union Dinosaurs of Eastern, Braniff and Pan American have already succumbed
to the Free-Market tar
pits. Now, the test is to see if the remaining Union Dinosaurs
have learned anything, while they witnessed the carnage. If not, Delta, United, Northwest and US Airways are surely next on the
tar pit list. Free-Markets do not evaporate simply because the Roger Halls and Frederick Dubinskys of the world,
assure their gullibles they do not exist. ALPA's magic wand (in the shape of a
baseball bat), like sugar candy in a hurricane, has melted away,
leaving only empty rhetoric in its wake.
July 11, 2004: Will
UAL be forced to dump
its pension obligations on the PBGC?
If so, retired UAL Pilots could lose half or much more, than they are
currently receiving. UAL continues to lose
billion last year on revenue of $13.7 billion. Industry projections
have it losing more than $1 billion this year too." The costs of
bankruptcy itself are enormous. Only the lawyers come out on top
of that game. Had United's unions worked with management when the
alarm was first sounded, over two years before UAL was finally forced
into bankruptcy, they might have had to take less of a hit, and the
pensions would be less in jeopardy now. But Dubinsky and other union leaders
insisted upon digging in their heels, until billions were flushed down
the sewer----billions that could have gone towards necessary
restructuring outside of the bankruptcy route. With such union
millstones hung about the neck of United and other Legacy Airlines, is it any wonder
they are going the way of the dinosaurs?
July 09, 2004: Delta
Pilots still dragging
their heals while the airline hurtles towards bankruptcy. They
appear to have learned nothing from the experience at United, US Airways and AMR. DAL pilots are
only offering pay cuts of 13.5 percent and some work rule
changes. DAL management insists it must reduce pilot costs by 45%,
including pay cuts of 34.5%, plus productivity increases. DAL-ALPA pilots remain among the
highest paid in the industry.
July 02, 2004: UAL
Pension Plans on Shaky Grounds.
"Just a few weeks ago,
United said in a bankruptcy court filing that it
viewed its pension plans 'as untouchable unless there was no other
choice.' But that was before the government denied loan guarantees to
United. O. V. Delle-Femine, national director of the Aircraft Mechanics
Fraternal Association, said he now feared the worst. 'You've got to gut
the pension plans,' he said. 'I don't see any other way.'"
July 01, 2004: UAL
Labor Costs still too high to acquire loans to exit Bankruptcy.<>
the second-biggest US airline, must cut costs to attract investors and
lenders that will replace the US$2 billion in funding that would have
come with the guarantee. The three-member Air Transportation
Stabilization Board voted unanimously to oppose the request for a
US$1.1 billion guarantee, repeating its stance that UAL is capable of
getting loans without taxpayer support.
United's first-quarter cost to fly one seat one mile
was 10.2 US
cents while it was 9.5 US cents at American Airlines and 11.7 US cents
at US Airways.
Even after last year's worker concessions, United's
costs were 40
per cent higher than the 6.1 cents at JetBlue Airways Corp, a New
York-based low-fare carrier. Southwest, the biggest discounter and most
profitable US airline, had a unit cost of 7.8 US cents. US Airways
wants to get its cost down to between 7 cents and 8 cents, Mr Stephan
June 27, 2004: DAL inches closer to
Bankruptcy, as its pilots still refuse Reality. They are among the very highest paid pilots in
the industry, the $2 billion per year ALPA cost at DAL, being 50 %
higher than any other airline.
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